Carvana tumbles toward record low, a day after a record 39% plunge as liquidity concerns grow


Shares of Carvana Co. CVNA, -15.64% tumbled 16.9% in afternoon trading Monday, toward its lowest-ever close, to add to the record plunge suffered in the previous session. Last Thursday, after the company reported a much wider-than-expected loss and provided a downbeat outlook, the stock plummeted 39.0%, the biggest one-day drop since company went public in April 2017, as Wall Street grew more concerned about Carvana’s liquidity position given continued losses and a weakening economy. The company reported $316 million in cash and cash equivalents as of Sept. 30, down from $403 million as of Dec. 31. “With a deteriorating outlook, cash burn will remain high and liquidity will deteriorate,” Wedbush analyst Seth Basham wrote in a Friday note to clients. He believes the company will burn through cash and its revolving credit facilities in early 2024, meaning the company will have to raise cash in the coming months, likely through sale-leasebacks or outright sales of its about $2 billion of owned real estate. The stock has plummeted 96.9% year to date, the S&P 500 SPX, +0.96% has lost 20.5% this year.

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